Find a Restructuring & Insolvency Lawyer

Restructuring and insolvency work addresses what happens when a company cannot meet its obligations as they fall due, ranging from a negotiated reorganisation to a formal liquidation.

The UAE does not operate a single bankruptcy system. Onshore UAE, the DIFC and ADGM each run their own regime, with different courts, different procedures and, in places, genuinely different tools.

The DIFC and ADGM are financial free zones with their own courts and their own insolvency laws, operating independently of the onshore federal framework that applies elsewhere in the UAE.

This means the regime that applies to a distressed company depends on where it is registered, not simply on where it does business or where its assets happen to sit.

Federal Decree-Law 51 of 2023 provided at Article 5 for one or more courts or divisions to be designated as the Bankruptcy Court for onshore UAE bankruptcy matters. The law did not itself constitute that court; a Federal Judiciary Council decision issued in July 2025 did, seating it at the Abu Dhabi Federal Courts of First Instance.

Two things are frequently got wrong. The first is that it is assumed to be a Dubai institution. The second is subtler and matters just as much: the Abu Dhabi Federal Courts of First Instance are part of the federal judiciary, not the Abu Dhabi emirate-level judiciary that shares a similar name. The Federal Judiciary Council may also establish branches in other emirates with the same jurisdiction, so for any onshore filing or defence the current seat is worth confirming rather than assumed from an older source.

This law restated and updated the onshore UAE bankruptcy framework, in force 1 May 2024, covering preventive composition, restructuring and liquidation procedures for onshore companies. Article 3(2) carves out free zone entities that have their own insolvency regimes, which is why DIFC and ADGM companies fall outside it.

A lawyer with current experience of this framework can advise on which procedure realistically fits a company’s specific financial position.

Onshore UAE law does not recognise a scheme of arrangement in the way some other jurisdictions do, and it does not recognise a floating charge.

This has real practical consequences: security generally needs to be taken over specific, identified assets, and certain restructuring techniques familiar from other systems simply are not available onshore. A lawyer can advise on what actually is available instead.

ADGM alone, among the UAE’s insolvency regimes, offers a Deed of Company Arrangement, a tool that lets a company reach a binding arrangement with its creditors.

ADGM’s regime also provides for cross-class cram-down, allowing a restructuring to bind a dissenting class of creditors in appropriate circumstances. Neither tool is available onshore or under the DIFC’s regime.

The DIFC runs its own insolvency framework, distinct from both the onshore federal law and ADGM’s regime, applicable to entities registered within the DIFC.

A DIFC entity in distress needs advice grounded specifically in DIFC insolvency law, not an assumption that onshore or ADGM rules carry across.

A group with entities spanning mainland UAE, the DIFC and ADGM can find itself navigating three independently operating insolvency regimes at once, each with its own court and its own tools.

Coordinating strategy across all three, rather than assuming one regime’s approach applies group-wide, is often the difference between an orderly restructuring and a fragmented one.

Onshore UAE law provides preventive composition and restructuring procedures intended to give a distressed but fundamentally viable company a path to reorganise short of liquidation.

Which option fits depends heavily on the company’s specific financial position and the willingness of its creditors, a lawyer can advise on the realistic path forward.

Liquidation generally involves realising a company’s assets and distributing the proceeds to creditors according to their priority, under court or appointed-liquidator oversight, before the company is dissolved.

The specific process and timeline depend on the regime involved, onshore, DIFC or ADGM, and on whether the liquidation is voluntary or ordered by the court.

Secured creditors generally have rights specifically tied to the assets covered by their security, while unsecured creditors rank behind them for those particular assets.

Given that onshore UAE law does not recognise a floating charge, how security was actually taken matters a great deal to how a creditor’s position plays out in a distress scenario.

Directors of a company approaching insolvency can face personal exposure depending on their conduct, particularly around continuing to trade or take on credit once financial difficulty is apparent.

Directors facing this situation benefit from independent legal advice on their own position, separate from advice given to the company itself.

A UAE entity with foreign creditors or assets abroad, or a foreign entity with UAE assets, raises cross-border recognition questions that depend on the specific jurisdictions involved.

This is a genuinely complex area, and a lawyer experienced in multi-jurisdiction distress situations can advise on how a UAE process interacts with proceedings or assets elsewhere.

Selling a distressed business as a going concern, either alongside or instead of formal liquidation, is often considered when there is value in preserving operations, employment or key relationships.

A lawyer can advise on how a distressed sale interacts with the applicable insolvency procedure and creditor interests.

Larger firms may bring more resources for complex, multi-jurisdiction restructurings involving several regimes at once.

Independent lawyers with genuine, current insolvency experience can offer more direct, accessible support for a single-entity matter. This is a preference you can share through Legal Connect.

LEXNOVA is not a law firm and does not provide legal advice. Legal Connect exists to help you describe a restructuring or insolvency matter clearly, then explore potentially suitable lawyers from our network.

We consider which regime applies, whether you are a debtor or a creditor, and the urgency of the situation, with every potential match reviewed by a person before an introduction.

Fees vary based on the complexity of the company’s structure, the number of creditors involved, and whether the matter is contested.

LEXNOVA does not set or control fees, this is communicated directly by each professional, and it is reasonable to request a clear estimate before engaging anyone.